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                                                                     EXHIBIT 4.8

                          THE STRIDE RITE CORPORATION
                      2001 STOCK OPTION AND INCENTIVE PLAN


SECTION 1.  GENERAL PURPOSE OF THE PLAN; DEFINITIONS
            ----------------------------------------

     The name of the plan is The Stride Rite Corporation 2001 Stock Option and
Incentive Plan (the "Plan").  The purpose of the Plan is to encourage and enable
the officers, employees, and other key persons (including consultants) of The
Stride Rite Corporation (the "Company") and its Subsidiaries upon whose
judgment, initiative and efforts the Company largely depends for the successful
conduct of its business to acquire a proprietary interest in the Company.  It is
anticipated that providing such persons with a direct stake in the Company's
welfare will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.

     The following terms shall be defined as set forth below:

     "Act" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

     "Administrator" is defined in Section 2(a).

     "Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Deferred Stock Awards, Restricted Stock Awards, Unrestricted Stock
Awards, Performance Share Awards and Dividend Equivalent Rights.

     "Board" means the Board of Directors of the Company.

     "Change of Control" is defined in Section 16.

     "Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

     "Committee" means the Committee of the Board referred to in Section 2.

     "Covered Employee" means an employee who is a "Covered Employee" within the
meaning of Section 162(m) of the Code.

     "Deferred Stock Award" means Awards granted pursuant to Section 7.

     "Dividend Equivalent Right" means Awards granted pursuant to Section 11.

     "Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 18.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.

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          "Fair Market Value" of the Stock on any given date means the last
reported sale price of the Stock on the last trading date on which the Stock was
traded preceding the specified date or, if no Stock was traded on such date, the
most recent date on which Stock was traded preceding the specified date, as
reflected on The New York Stock Exchange -- Composite Tape or, if not listed on
such exchange, on any other national securities exchange on which the Stock is
listed or on the National Association of Securities Dealers Automated Quotation
system, or par value of Stock if greater.

     "Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.

     "Independent Director" means a member of the Board who is not also an
employee of the Company or any Subsidiary.

     "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

     "Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.

     "Performance Share Award" means Awards granted pursuant to Section 9.

     "Performance Cycle" means one or more periods of time, which may be of
varying and overlapping durations, as the Administrator may select, over which
the attainment of one or more performance criteria will be measured for the
purpose of determining a grantee's right to and the payment of a Performance
Share Award, Restricted Stock Award or Deferred Stock Award.

     "Restricted Stock Award" means Awards granted pursuant to Section 6.

     "Stock" means the Common Stock, par value $.25 per share, of the Company,
subject to adjustments pursuant to Section 3.

     "Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities beginning with the
Company if each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests possessing 50
percent or more of the economic interest or the total combined voting power of
all classes of stock or other interests in one of the other corporations or
entities in the chain.

     "Unrestricted Stock Award" means any Award granted pursuant to Section 8.

SECTION 2.  ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES
            ------------------------------------------------------------------
            AND DETERMINE AWARDS
            --------------------

     (a) Committee.  The Plan shall be administered by either the Board or a
committee of not less than two Independent Directors (in either case, the
"Administrator").

     (b) Powers of Administrator.  The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:

          (i) to select the individuals to whom Awards may from time to time be
     granted;

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          (ii) to determine the time or times of grant, and the extent, if any,
     of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
     Awards, Deferred Stock Awards, Unrestricted Stock Awards, Performance Share
     Awards and Dividend Equivalent Rights, or any combination of the foregoing,
     granted to any one or more grantees;

          (iii)  to determine the number of shares of Stock to be covered by any
     Award;

          (iv) to determine and modify from time to time the terms and
     conditions, including restrictions, not inconsistent with the terms of the
     Plan, of any Award, which terms and conditions may differ among individual
     Awards and grantees, and to approve the form of written instruments
     evidencing the Awards;

          (v) to accelerate at any time the exercisability or vesting of all or
     any portion of any Award;

          (vi) subject to the provisions of Section 5(a)(ii), to extend at any
     time the period in which Stock Options may be exercised;

          (vii)  to determine at any time whether, to what extent, and under
     what circumstances distribution or the receipt of Stock and other amounts
     payable with respect to an Award shall be deferred either automatically or
     at the election of the grantee and whether and to what extent the Company
     shall pay or credit amounts constituting interest (at rates determined by
     the Administrator) or dividends or deemed dividends on such deferrals; and

          (viii)  at any time to adopt, alter and repeal such rules, guidelines
     and practices for administration of the Plan and for its own acts and
     proceedings as it shall deem advisable; to interpret the terms and
     provisions of the Plan and any Award (including related written
     instruments); to make all determinations it deems advisable for the
     administration of the Plan; to decide all disputes arising in connection
     with the Plan; and to otherwise supervise the administration of the Plan.

     All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan grantees.

     (c) Indemnification.  Neither the Board nor the Committee, nor any member
of either or any delegatee thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and the Committee (and any delegatee
thereof) shall be entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys' fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under any directors' and officers'
liability insurance coverage which may be in effect from time to time.

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SECTION 3.  STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
            ----------------------------------------------------

     (a) Stock Issuable.  The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be (i) 2,000,000 shares, plus (ii)
such number of shares (not to exceed 1,000,000) which would be available for
issuance under the Company's 1998 Stock Option Plan but for its expiration, with
such total subject to adjustment as provided in Section 3(b); provided that not
more than 1,000,000 shares shall be issued in the form of Unrestricted Stock
Awards, Restricted Stock Awards, or Performance Share Awards except to the
extent such Awards are granted in lieu of cash compensation or fees. For
purposes of this limitation, the shares of Stock underlying any Awards which are
forfeited, canceled, reacquired by the Company, satisfied without the issuance
of Stock or otherwise terminated (other than by exercise) shall be added back to
the shares of Stock available for issuance under the Plan.  Subject to such
overall limitation, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award; provided, however, that Stock Options
with respect to no more than 500,000 shares of Stock may be granted to any one
individual grantee during any one calendar year period.  The shares available
for issuance under the Plan may be authorized but unissued shares of Stock or
shares of Stock reacquired by the Company and held in its treasury.

     (b) Changes in Stock.  Subject to Section 3(c) hereof, if, as a result of
any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company's capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for a different
number or kind of securities of the Company or any successor entity (or a parent
or subsidiary thereof), the Administrator shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, including the maximum number of shares that may be
issued in the form of Unrestricted Stock Awards, Restricted Stock Awards or
Performance Share Awards, (ii) the number of Stock Options that can be granted
to any one individual grantee and the maximum number of shares that may be
granted under a Performance-based Award, (iii) the number and kind of shares or
other securities subject to any then outstanding Awards under the Plan, (iv) the
repurchase price per share subject to each outstanding Restricted Stock Award,
and (v) the price for each share subject to any then outstanding Stock Options
under the Plan, without changing the aggregate exercise price (i.e., the
exercise price multiplied by the number of Stock Options) as to which such Stock
Options remain exercisable.  The adjustment by the Administrator shall be final,
binding and conclusive.  No fractional shares of Stock shall be issued under the
Plan resulting from any such adjustment, but the Administrator in its discretion
may make a cash payment in lieu of fractional shares.

     The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the grantee, if it would constitute a modification, extension or
renewal of the Option within the meaning of Section 424(h) of the Code.

     (c) Mergers and Other Transactions.  In the case of and subject to the
consummation of (i) the dissolution or liquidation of the Company, (ii) the sale
of all or substantially all of the assets of the Company on a consolidated basis
to an unrelated person or entity, (iii) a merger, reorganization or
consolidation in which the outstanding shares of Stock are converted into or
exchanged for a different kind of securities of the

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successor entity and the holders of the Company's outstanding voting power
immediately prior to such transaction do not own a majority of the outstanding
voting power of the successor entity immediately upon completion of such
transaction, or (iv) the sale of all of the Stock of the Company to an unrelated
person or entity (in each case, a "Sale Event"), all Options that are not
exercisable immediately prior to the effective time of the Sale Event shall
become fully exercisable as of the effective time of the Sale Event and all
other Awards with conditions and restrictions relating solely to the passage of
time and continued employment shall become fully vested and nonforfeitable as of
the effective time of the Sale Event, except as the Administrator may otherwise
specify with respect to particular Awards.  Upon the effective time of the Sale
Event, the Plan and all outstanding Awards granted hereunder shall terminate,
unless provision is made in connection with the Sale Event in the sole
discretion of the parties thereto for the assumption or continuation of Awards
theretofore granted by the successor entity, or the substitution of such Awards
with new Awards of the successor entity or parent thereof, with appropriate
adjustment as to the number and kind of shares and, if appropriate, the per
share exercise prices, as such parties shall agree (after taking into account
any acceleration hereunder).  In the event of such termination, each grantee
shall be permitted, within a specified period of time prior to the consummation
of the Sale Event as determined by the Administrator, to exercise all
outstanding Options held by such grantee, including those that will become
exercisable upon the consummation of the Sale Event; provided, however, that the
exercise of Options not exercisable prior to the Sale Event shall be subject to
the consummation of the Sale Event.

     Notwithstanding anything to the contrary in this Section 3.2(c), in the
event of a Sale Event pursuant to which holders of the Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the Sale Event, the Company shall have the right, but not the obligation, to
make or provide for a cash payment to the grantees holding Options, in exchange
for the cancellation thereof, in an amount equal to the difference between (A)
the value as determined by the Administrator of the consideration payable per
share of Stock pursuant to the Sale Event (the "Sale Price") times the number of
shares of Stock subject to outstanding Options (to the extent then exercisable
at prices not in excess of the Sale Price) and (B) the aggregate exercise price
of all such outstanding Options.

     (d) Substitute Awards.  The Administrator may grant Awards under the Plan
in substitution for stock and stock based awards held by employees, directors or
other key persons of another corporation in connection with the merger or
consolidation of the employing corporation with the Company or a Subsidiary or
the acquisition by the Company or a Subsidiary of property or stock of the
employing corporation.  The Administrator may direct that the substitute awards
be granted on such terms and conditions as the Administrator considers
appropriate in the circumstances.  Any substitute Awards granted under the Plan
shall not count against the share limitation set forth in Section 3(a).

SECTION 4.  ELIGIBILITY
            -----------

     Grantees under the Plan will be such full or part-time officers and other
employees and key persons (including consultants and prospective employees) of
the Company and its Subsidiaries as are selected from time to time by the
Administrator in its sole discretion.

SECTION 5.  STOCK OPTIONS
            -------------

     Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.

     Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options.  Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is

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a "subsidiary corporation" within the meaning of Section 424(f) of the Code.  To
the extent that any Option does not qualify as an Incentive Stock Option, it
shall be deemed a Non-Qualified Stock Option.

     No Incentive Stock Option shall be granted under the Plan after April 12,
2011.

     (a) Stock Options Granted to Employees and Key Persons.  The Administrator
in its discretion may grant Stock Options to eligible employees and key persons
of the Company or any Subsidiary.  Stock Options granted pursuant to this
Section 5(a) shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Administrator shall deem desirable.  If the Administrator so
determines, Stock Options may be granted in lieu of cash compensation at the
optionee's election, subject to such terms and conditions as the Administrator
may establish.

          (i) Exercise Price.  The exercise price per share for the Stock
     covered by a Stock Option granted pursuant to this Section 5(a) shall be
     determined by the Administrator at the time of grant but shall not be less
     than 100 percent of the Fair Market Value on the date of grant.  If an
     employee owns or is deemed to own (by reason of the attribution rules of
     Section 424(d) of the Code) more than 10 percent of the combined voting
     power of all classes of stock of the Company or any parent or subsidiary
     corporation and an Incentive Stock Option is granted to such employee, the
     option price of such Incentive Stock Option shall be not less than 110
     percent of the Fair Market Value on the grant date.

          (ii) Option Term.  The term of each Stock Option shall be fixed by the
     Administrator, but no Stock Option shall be exercisable more than 10 years
     after the date the Stock Option is granted.  If an employee owns or is
     deemed to own (by reason of the attribution rules of Section 424(d) of the
     Code) more than 10 percent of the combined voting power of all classes of
     stock of the Company or any parent or subsidiary corporation and an
     Incentive Stock Option is granted to such employee, the term of such Stock
     Option shall be no more than five years from the date of grant.

          (iii)  Exercisability; Rights of a Stockholder.  Stock Options shall
     become exercisable at such time or times, whether or not in installments,
     as shall be determined by the Administrator at or after the grant date.
     The Administrator may at any time accelerate the exercisability of all or
     any portion of any Stock Option.  An optionee shall have the rights of a
     stockholder only as to shares acquired upon the exercise of a Stock Option
     and not as to unexercised Stock Options.

          (iv) Method of Exercise.  Stock Options may be exercised in whole or
     in part, by giving written notice of exercise to the Company, specifying
     the number of shares to be purchased.  Payment of the purchase price may be
     made by one or more of the following methods to the extent provided in the
     Option Award agreement:

               (A) In cash, by certified or bank check or other instrument
          acceptable to the Administrator;

               (B) Through the delivery (or attestation to the ownership) of
          shares of Stock that have been purchased by the optionee on the open
          market or that have been beneficially owned by the optionee for at
          least six months and are not then subject to restrictions under any
          Company plan.  Such surrendered shares shall be valued at Fair Market
          Value on the exercise date; or

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               (C) By the optionee delivering to the Company a properly executed
          exercise notice together with irrevocable instructions to a broker to
          promptly deliver to the Company cash or a check payable and acceptable
          to the Company for the purchase price; provided that in the event the
          optionee chooses to pay the purchase price as so provided, the
          optionee and the broker shall comply with such procedures and enter
          into such agreements of indemnity and other agreements as the
          Administrator shall prescribe as a condition of such payment
          procedure.

     Payment instruments will be received subject to collection.  The delivery
     of certificates representing the shares of Stock to be purchased pursuant
     to the exercise of a Stock Option will be contingent upon receipt from the
     optionee (or a purchaser acting in his stead in accordance with the
     provisions of the Stock Option) by the Company of the full purchase price
     for such shares and the fulfillment of any other requirements contained in
     the Option Award agreement or applicable provisions of laws.  In the event
     an optionee chooses to pay the purchase price by previously-owned shares of
     Stock through the attestation method, the number of shares of Stock
     transferred to the optionee upon the exercise of the Stock Option shall be
     net of the number of shares attested to.

          (v) Annual Limit on Incentive Stock Options.  To the extent required
     for "incentive stock option" treatment under Section 422 of the Code, the
     aggregate Fair Market Value (determined as of the time of grant) of the
     shares of Stock with respect to which Incentive Stock Options granted under
     this Plan and any other plan of the Company or its parent and subsidiary
     corporations become exercisable for the first time by an optionee during
     any calendar year shall not exceed $100,000.  To the extent that any Stock
     Option exceeds this limit, it shall constitute a Non-Qualified Stock
     Option.

     (b) Non-transferability of Options.  No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee, or by the optionee's legal representative or
guardian in the event of the optionee's incapacity.  Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide in the Award
agreement regarding a given Option that the optionee may transfer his Non-
Qualified Stock Options to members of his immediate family, to trusts for the
benefit of such family members, or to partnerships in which such family members
are the only partners, provided that the transferee agrees in writing with the
Company to be bound by all of the terms and conditions of this Plan and the
applicable Option.

SECTION 6.  RESTRICTED STOCK AWARDS
            -----------------------

     (a) Nature of Restricted Stock Awards.  A Restricted Stock Award is an
Award entitling the recipient to acquire, at such purchase price as determined
by the Administrator, shares of Stock subject to such restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock").  Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives.  The grant of a Restricted Stock Award is contingent on the grantee
executing the Restricted Stock Award agreement.  The terms and conditions of
each such agreement shall be determined by the Administrator, and such terms and
conditions may differ among individual Awards and grantees.

     (b) Rights as a Stockholder.  Upon execution of a written instrument
setting forth the Restricted Stock Award and payment of any applicable purchase
price, a grantee shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award.  Unless the
Administrator shall otherwise determine, certificates evidencing the Restricted
Stock shall remain in the possession of the Company until such Restricted

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Stock is vested as provided in Section 6(d) below, and the grantee shall be
required, as a condition of the grant, to deliver to the Company a stock power
endorsed in blank.

     (c) Restrictions.  Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock Award agreement.  If a grantee's employment
(or other service relationship) with the Company and its Subsidiaries terminates
for any reason, the Company shall have the right to repurchase Restricted Stock
that has not vested at the time of termination at its original purchase price,
from the grantee or the grantee's legal representative.

     (d) Vesting of Restricted Stock.  The Administrator at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the non-
transferability of the Restricted Stock and the Company's right of repurchase or
forfeiture shall lapse.  Subsequent to such date or dates and/or the attainment
of such pre-established performance goals, objectives and other conditions, the
shares on which all restrictions have lapsed shall no longer be Restricted Stock
and shall be deemed "vested."  Except as may otherwise be provided by the
Administrator either in the Award agreement or, subject to Section 14 below, in
writing after the Award agreement is issued, a grantee's rights in any shares of
Restricted Stock that have not vested shall automatically terminate upon the
grantee's termination of employment (or other service relationship) with the
Company and its Subsidiaries and such shares shall be subject to the Company's
right of repurchase as provided in Section 6(c) above.

     (e) Waiver, Deferral and Reinvestment of Dividends.  The Restricted Stock
Award agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends paid on the Restricted Stock.

SECTION 7.  DEFERRED STOCK AWARDS
            ---------------------

     (a) Nature of Deferred Stock Awards.   A Deferred Stock Award is an Award
of phantom stock units to a grantee, subject to restrictions and conditions as
the Administrator may determine at the time of grant.  Conditions may be based
on continuing employment (or other service relationship) and/or achievement of
pre-established performance goals and objectives.  The grant of a Deferred Stock
Award is contingent on the grantee executing the Deferred Stock Award agreement.
The terms and conditions of each such agreement shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and grantees.  At the end of the deferral period, the Deferred Stock Award, to
the extent vested, shall be paid to the grantee in the form of shares of Stock.

     (b) Election to Receive Deferred Stock Awards in Lieu of Compensation.  The
Administrator may, in its sole discretion, permit a grantee to elect to receive
a portion of the cash compensation or Restricted Stock Award otherwise due to
such grantee in the form of a Deferred Stock Award.  Any such election shall be
made in writing and shall be delivered to the Company no later than the date
specified by the Administrator and in accordance with rules and procedures
established by the Administrator.  The Administrator shall have the sole right
to determine whether and under what circumstances to permit such elections and
to impose such limitations and other terms and conditions thereon as the
Administrator deems appropriate.

     (c) Rights as a Stockholder.  During the deferral period, a grantee shall
have no rights as a stockholder; provided, however, that the grantee may be
credited with Dividend Equivalent Rights with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Administrator may determine.

     (d) Restrictions.  A Deferred Stock Award may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of during the deferral
period.

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     (e) Termination.  Except as may otherwise be provided by the Administrator
either in the Award agreement or, subject to Section 14 below, in writing after
the Award agreement is issued, a grantee's right in all Deferred Stock Awards
that have not vested shall automatically terminate upon the grantee's
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.

SECTION 8.  UNRESTRICTED STOCK AWARDS
            -------------------------

     Grant or Sale of Unrestricted Stock.  The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Administrator) an Unrestricted Stock Award to any grantee pursuant to
which such grantee may receive shares of Stock free of any restrictions
("Unrestricted Stock") under the Plan.  Unrestricted Stock Awards may be granted
in respect of past services or other valid consideration, or in lieu of cash
compensation due to such grantee.

SECTION 9.  PERFORMANCE SHARE AWARDS
            ------------------------

     (a) Nature of Performance Share Awards.  A Performance Share Award is an
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals.  The Administrator may make Performance Share
Awards independent of or in connection with the granting of any other Award
under the Plan.  The Administrator in its sole discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals, the periods during which performance is to be measured, and all other
limitations and conditions.

     (b) Rights as a Stockholder.  A grantee receiving a Performance Share Award
shall have the rights of a stockholder only as to shares actually received by
the grantee under the Plan and not with respect to shares subject to the Award
but not actually received by the grantee.  A grantee shall be entitled to
receive a stock certificate evidencing the acquisition of shares of Stock under
a Performance Share Award only upon satisfaction of all conditions specified in
the Performance Share Award agreement (or in a performance plan adopted by the
Administrator).

     (c) Termination.  Except as may otherwise be provided by the Administrator
either in the Award agreement or, subject to Section 14 below, in writing after
the Award agreement is issued, a grantee's rights in all Performance Share
Awards shall automatically terminate upon the grantee's termination of
employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.

     (d) Acceleration, Waiver, Etc.  At any time prior to the grantee's
termination of employment (or other service relationship) by the Company and its
Subsidiaries, the Administrator may in its sole discretion accelerate, waive or,
subject to Section 14, amend any or all of the goals, restrictions or conditions
applicable to a Performance Share Award.

SECTION 10.  PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
             ---------------------------------------------

     Notwithstanding anything to the contrary contained herein, if any
Restricted Stock Award, Deferred Stock Award or Performance Share Award granted
to a Covered Employee is intended to qualify as "Performance-based Compensation"
under Section 162(m) of the Code and the regulations promulgated thereunder (a
"Performance-based Award"), such Award shall comply with the provisions set
forth below:

     (a) Performance Criteria.  The performance criteria used in performance
goals governing Performance-based Awards granted to Covered Employees may
include any or all of the following:  (i) the Company's return on equity,
assets, capital or investment, (ii) pre-tax or after-tax profit levels of the
Company or any Subsidiary, a division, an operating unit or a business segment
of the Company, or any combination of

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the foregoing; (iii) cash flow, funds from operations or similar measure; (iv)
total shareholder return; (v) changes in the market price of the Stock; (vi)
sales or market share; or (vii) earnings per share.

     (b) Grant of Performance-based Awards.  With respect to each Performance-
based Award granted to a Covered Employee, the Committee shall select, within
the first 90 days of a Performance Cycle (or, if shorter, within the maximum
period allowed under Section 162(m) of the Code) the performance criteria for
such grant, and the achievement targets with respect to each performance
criterion (including a threshold level of performance below which no amount will
become payable with respect to such Award).  Each Performance-based Award will
specify the amount payable, or the formula for determining the amount payable,
upon achievement of the various applicable performance targets.  The performance
criteria established by the Committee may be (but need not be) different for
each Performance Cycle and different goals may be applicable to Performance-
based Awards to different Covered Employees.

     (c) Payment of Performance-based Awards.  Following the completion of a
Performance Cycle, the Committee shall meet to review and certify in writing
whether, and to what extent, the performance criteria for the Performance Cycle
have been achieved and, if so, to also calculate and certify in writing the
amount of the Performance-based Awards earned for the Performance Cycle.  The
Committee shall then determine the actual size of each Covered Employee's
Performance-based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.

     (d) Maximum Award Payable.  The maximum Performance-based Award payable to
any one Covered Employee under the Plan for a Performance Cycle is 500,000
Shares (subject to adjustment as provided in Section 3(b) hereof).

SECTION 11.  DIVIDEND EQUIVALENT RIGHTS
             --------------------------

     (a) Dividend Equivalent Rights.  A Dividend Equivalent Right is an Award
entitling the grantee to receive credits based on cash dividends that would have
been paid on the shares of Stock specified in the Dividend Equivalent Right (or
other award to which it relates) if such shares had been issued to and held by
the grantee.  A Dividend Equivalent Right may be granted hereunder to any
grantee as a component of another Award or as a freestanding award.  The terms
and conditions of Dividend Equivalent Rights shall be specified in the Award
agreement.  Dividend equivalents credited to the holder of a Dividend Equivalent
Right may be paid currently or may be deemed to be reinvested in additional
shares of Stock, which may thereafter accrue additional equivalents.  Any such
reinvestment shall be at Fair Market Value on the date of reinvestment or such
other price as may then apply under a dividend reinvestment plan sponsored by
the Company, if any.  Dividend Equivalent Rights may be settled in cash or
shares of Stock or a combination thereof, in a single installment or
installments.  A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other
award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other award.  A Dividend Equivalent
Right granted as a component of another Award may also contain terms and
conditions different from such other award.

     (b) Interest Equivalents.  Any Award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment.  Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.

                                       10
<PAGE>

     (c) Termination.  Except as may otherwise be provided by the Administrator
either in the Award agreement or, subject to Section 14 below, in writing after
the Award agreement is issued, a grantee's rights in all Dividend Equivalent
Rights or interest equivalents shall automatically terminate upon the grantee's
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.

SECTION 12.  TAX WITHHOLDING
             ---------------

     (a) Payment by Grantee.  Each grantee shall, no later than the date as of
which the value of an Award or of any Stock or other amounts received thereunder
first becomes includable in the gross income of the grantee for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such income.  The Company
and its Subsidiaries shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the grantee.
The Company's obligation to deliver stock certificates to any grantee is subject
to and conditioned on tax obligations being satisfied by the grantee.

     (b) Payment in Stock.  Subject to approval by the Administrator, a grantee
may elect to have the minimum required tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the grantee with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.

SECTION 13.  TRANSFER, LEAVE OF ABSENCE, ETC.
             -------------------------------

     For purposes of the Plan, the following events shall not be deemed a
termination of employment:

     (a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or

     (b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to re-
employment is guaranteed either by a statute or by contract or under the policy
pursuant to which the leave of absence was granted or if the Administrator
otherwise so provides in writing.

SECTION 14.  AMENDMENTS AND TERMINATION
             --------------------------

     The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent.  If and to the extent determined by the Administrator to
be required by the Code to ensure that Incentive Stock Options granted under the
Plan are qualified under Section 422 of the Code or to ensure that compensation
earned under Awards qualifies as performance-based compensation under Section
162(m) of the Code, if and to the extent intended to so qualify, Plan amendments
shall be subject to approval by the Company stockholders entitled to vote at a
meeting of stockholders.  Nothing in this Section 14 shall limit the
Administrator's authority to take any action permitted pursuant to Section 3(c).

                                       11
<PAGE>

SECTION 15.  STATUS OF PLAN
             --------------

     With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Administrator shall otherwise expressly determine in
connection with any Award or Awards.  In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

SECTION 16.  CHANGE OF CONTROL PROVISIONS
             ----------------------------

     Upon the occurrence of a Change of Control as defined in this Section 16:

     (a) Except as otherwise provided in the applicable Award agreement, each
outstanding Stock Option shall automatically become fully exercisable.

     (b) Except as otherwise provided in the applicable Award Agreement,
conditions and restrictions on each outstanding Restricted Stock Award, Deferred
Stock Award and Performance Share Award which relate solely to the passage of
time and continued employment will be removed.  Performance or other conditions
(other than conditions and restrictions relating solely to the passage of time
and continued employment) will continue to apply unless otherwise provided in
the applicable Award agreement.

     (c) "Change of Control" shall mean the occurrence of any one of the
following events:

          (i) The acquisition by any individual, entity or group (within the
     meaning of Section 13(d)(3) or 14(d)(2) of the Act (a "Person")) together
     with all "affiliates" and "associates" (as such terms are defined in Rule
     12b-2 under the Exchange Act) of such person, of beneficial ownership
     (within the meaning of Rule 13d-3 promulgated under the Act) of 20% or more
     of either (1) the then outstanding shares of stock (the "Outstanding
     Company Common Stock") or (ii) the combined voting power of the then
     outstanding voting securities of the Company entitled to vote generally in
     the election of directors (the "Outstanding Company Voting Securities");
     provided, however, that for purposes of this subsection (i) the following
     acquisitions shall not constitute a Change of Control: (A) any acquisition
     directly from the Company, (B) any acquisition by the Company, (C) any
     acquisition by any employee benefit plan (or related trust) sponsored or
     maintained by the Company or any corporation controlled by the Company, or
     (D) any acquisition by any corporation pursuant to a transaction that
     complies with clauses (A), (B) and (C) of subsection (iii) below.

          (ii) Individuals who, as of April 13, 2001, constitute the Board (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     of the Board; provided, however, that any individual becoming a director
     subsequent to the date hereof whose election, or nomination for election by
     the Company's shareholders, was approved by a vote of at least a majority
     of the directors then comprising the Incumbent Board shall be considered as
     though such individual were a member of the Incumbent Board, but excluding,
     for this purpose, any such individual whose initial assumption of office
     occurs as a result of an actual or threatened election contest with respect
     to the election or removal of directors or other actual or threatened
     solicitation of proxies or consents by or on behalf of a Person other than
     the Board; or

                                      12
<PAGE>

          (iii)  The approval by the shareholders of the Company of a
     reorganization, merger or consolidation or sale or other disposition of all
     or substantially all of the assets of the Company or the acquisition of
     assets of another entity ("Business Combination") or, if consummation of
     such Business Combination is subject, at the time of such approval by
     shareholders, to the consent of any government or governmental agency, the
     obtaining of such consent (either explicitly or implicitly by
     consummation), in each case, unless following such Business Combination:
     (A) all or substantially all of the individuals and entities who were the
     beneficial owners, respectively of the Outstanding Company Common Stock or
     the Outstanding Company Voting Securities immediately prior to such
     Business Combination will beneficially own (as such term is defined in Rule
     13d-3 under the Act), directly or indirectly, more than 60% of,
     respectively, the then outstanding shares of common stock and the combined
     voting power of then outstanding voting securities entitled to vote
     generally in the election of directors, as the case may be, of the
     corporation resulting from such Business Combination (including, without
     limitation, a corporation that as a result of such transaction owns the
     Company or all or substantially all of the Company's assets either directly
     or through one or more subsidiaries) in substantially the same proportions
     as their ownership, immediately prior to such Business Combination of the
     Outstanding Company Common Stock or the Outstanding Company Voting
     Securities, as the case may be, (B) no Person (excluding any employee
     benefit plan (or related trust) of the Company or such corporation
     resulting from such Business Combination) will beneficially own, directly
     or indirectly, 20% or more of, respectively, the then outstanding shares of
     common stock of the corporation resulting from such Business Combination or
     the combined voting power of the then outstanding voting securities of such
     corporation except to the extent that such ownership existed prior to the
     Business Combination and (B) at least a majority of the members of the
     Board of Directors of the corporation resulting from such Business
     Combination will have been members of the Incumbent Board at the time of
     the execution of the initial agreement, or of the action of the Board,
     providing for such Business Combination; or

          (iv) Approval by the stockholders of the Company of a complete
     liquidation or dissolution of the Company.

     Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person to 20 percent or
more of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company) and immediately thereafter beneficially owns 20 percent or more of the
combined voting power of all then outstanding Voting Securities, then a "Change
of Control" shall be deemed to have occurred for purposes of the foregoing
clause (i).

SECTION 17.  GENERAL PROVISIONS
             ------------------

     (a) No Distribution; Compliance with Legal Requirements.  The Administrator
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.

     No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied.  The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Awards as
it deems appropriate.

                                      13
<PAGE>

     (b) Delivery of Stock Certificates.  Stock certificates to grantees under
this Plan shall be deemed delivered for all purposes when the Company or a stock
transfer agent of the Company shall have mailed such certificates in the United
States mail, addressed to the grantee, at the grantee's last known address on
file with the Company.

     (c) Other Compensation Arrangements; No Employment Rights.  Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases.  The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

     (d) Trading Policy Restrictions.  Option exercises and other Awards under
the Plan shall be subject to such Company's insider trading policy, as in effect
from time to time.

     (e) Loans to Grantees.  The Company shall have the authority to make loans
to grantees of Awards hereunder (including to facilitate the purchase of shares)
and shall further have the authority to issue shares for promissory notes
hereunder.

     (f) Designation of Beneficiary.  Each grantee to whom an Award has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee's
death.  Any such designation shall be on a form provided for that purpose by the
Administrator and shall not be effective until received by the Administrator.
If no beneficiary has been designated by a deceased grantee, or if the
designated beneficiaries have predeceased the grantee, the beneficiary shall be
the grantee's estate.

SECTION 18.  EFFECTIVE DATE OF PLAN
             ----------------------

     This Plan shall become effective upon approval by the holders of a majority
of the votes cast at a meeting of stockholders at which a quorum is present.
Subject to such approval by the stockholders and to the requirement that no
Stock may be issued hereunder prior to such approval, Stock Options and other
Awards may be granted hereunder on and after adoption of this Plan by the Board.

SECTION 19.  GOVERNING LAW
             -------------

     This Plan and all Awards and actions taken thereunder shall be governed by,
and construed in accordance with, the laws of the Commonwealth of Massachusetts,
applied without regard to conflict of law principles.

                                      14